More than two out of five financial advisers expect increased demand for retirement income advice from women in the next year as gender equalisation on annuity rates comes into effect, research from Primetime Retirement shows.
Its nationwide survey of 321 advisers specialising in retirement advice shows 44 per cent believe demand from women will increase driven by a combination of equalisation in annuity rates and changes to State Pension ages. Around three per cent have already seen a rise.
Analysts predict the new rules outlawing annuity pricing based on gender – which were outlined by a European Court of Justice ruling in March 2011 – will mean lower rates on lifetime annuities for males of around three per cent at a time when rates are already at an all-time low.
Primetime Retirement, which already offers gender neutral rates at the higher female rate on its fixed-term annuity products, believes the introduction of gender neutral rates from December 2012 will drive innovation in the annuity market.
The company, which pioneered the fixed-term annuity in the UK as Living Time, is urging advisers to start preparing clients now for the changes to rates amid predictions that the introduction of equalisation could mean a rush to annuitise before the changes.
Stuart Wilson, Primetime Retirement marketing director, says: “Gender equalisation will see a massive change in the annuity market and providers have to adapt and innovate in response.
We will have to wait and see how the market reacts and where unisex rates end up but it seems likely that male rates will be reduced which when rates are already at an all-time low, will be a further blow for retirement income planning. Advisers have a major role to play in helping clients and outlining the availability of and the need for more options in retirement income planning.”
Primetime’s research highlights the growing impact of divorce on demand for advice – around a third of advisers say they have seen more clients coming to them for retirement income advice following divorce.
The study shows 32 per cent have seen a small rise in the number of clients asking for advice following divorce, while twp per cent have seen a large increase.